Eurozone recovery shows very modest gains

Dec. 16, 2013 at 11:05 AM   |   0 comments

BRUSSELS, Dec. 16 (UPI) -- Business indexes in the eurozone in December pushed the region's purchasing managers index to the highest level in 10 quarters, Markit Economics said Monday.

Markit said economic growth accelerated for manufacturing firms. The service sector, by contrast, showed growth for the fifth consecutive month, but the rate of growth slowed "from the already weak pace seen in November," Markit said.

December marked the third consecutive month of slower growth in the service sector, Markit said. For the month, the flash estimate of the region's service sector showed a PMI at 51, down slightly from November's 51.2.

The manufacturing PMI for November reached a 31-month high at 52.7, up from November's reading of 51.6. Growth of new orders rose to the highest level since June 2011, the report said.

Further, the composite index rose to 52.1 in December, up from 51.7 in November. After two months of slowing growth, the composite index headed back towards September's 27-month peak, Markit said.

Markit Chief Economist Chris Williamson said the region's economic recovery was "back on track," but it was decidedly weak.

"The upturn means that, over the final quarter, businesses saw the strongest growth since the first half of 2011, and have now enjoyed two consecutive quarters of growth," he said.

Williamson also said there were several "worrying" aspects to the report.

The numbers indicate that there will be a "mere 0.2 percent expansion of the gross domestic product in the fourth quarter, suggesting the recovery remains both weak and fragile," he said.

In addition, Williamson noted that service sector growth was slowing, in contrast to the manufacturing sector.

Of even more concern, "France looks increasingly like the new 'sick man of Europe,'" Williamson said, noting that Germany's economy was poised to grow in the quarter, while France was close to sliding back into a recession.

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